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Apprenticeship starts rise

Apprenticeship numbers are up but still well below pre-levy figures, as reforms to the levy rules are due next week

Apprenticeship starts have increased over the past year, reaching 225,800 for the 2018-19 academic year, according to data released by the Department for Education (DfE).

This compares to 206,100 apprenticeship starts reported in the equivalent period in 2017-18. There has also been a 34% increase in the number of people aged 25 and over starting an apprenticeship.

However, the number remains well below levels reported before the introduction of the apprenticeship levy. The number of apprenticeship starts in 2016-17 stood at 269,600 and in 2015-16 it was 264,600.

Reforms to the original levy rules will be implemented next week, including an increase in the proportion of levy money employers can share with smaller companies in their supply chain from 10% to 25%. These changes come as the levy has faced ongoing criticism for being too rigid.

Karen Jones, group HR director at Redrow, commented that while the news is encouraging there are still challenges for small businesses when hiring apprentices.

“It is very promising to see that apprenticeship starts since the start of the academic year have risen 9% annually. Taking on an apprentice is a big investment for employers [and] the figures show that more businesses are recognising their benefits,” she said.

“The financial burden of hiring an apprentice continues to grow, however, locking smaller businesses out of the opportunity. Significantly, 38% of all construction SMEs that we recently surveyed that are not employing apprentices at the moment are failing to do so because of a lack of funding."

Making the apprenticeship levy more flexible would help make it more accessible to SMEs, she added.

“One way to ease the pressure would be by expanding the remit for what levy funds can be used for," she said, adding that greater flexibility would lessen cost burdens for SMEs such as wages, statutory licences to practise, travel and subsidiary costs, and costs for setting up a programme.

Sally Austin, group HR director at Costain, said it is vital that the government maintains its commitment to improving skills and training.

It’s critically important that the government maintains its progress on the National Retraining Scheme and therefore it was positive to see Philip Hammond use the recent Spring Statement as a platform to reiterate the commitment to apprenticeships. Everyone, no matter what their age, should have the opportunity to retrain or upskill in a new industry and have the support from both businesses and government to do so,” she said.

The government’s National Retraining Scheme was introduced in 2017 as an effort to 'help workers stay in jobs as the economy changes', as stated in the Conservative party's manifesto. While there has been little detail on what it entails, it is aimed at workers over the age of 24.

As the workforce faces rapid economic and technological changes employers must be prepared, Austin added.

“The UK is rich in talent across multiple sectors and we see the benefits in attracting a diverse range of ‘new blood’, who will have completely different but valuable skillsets to help the industry deliver highly-complex technology-based innovative solutions,” she said.

“As the technology revolution gathers momentum we need to ensure we have a strong supply of people with the requisite skills to deliver on our 21st-century requirements, and apprenticeships will play an essential role in developing skills for tomorrow. We look forward to hearing more from the government on what the National Retraining Scheme will look like in practice.”